Jackie Savitz: How BP Can Clear its Name: Invest 30% in Clean Energy

In the 7,000-word State of the Union, President Obama seemed to leave out two letters that loomed large in 2010. “B” and “P” — the initials of the company that destroyed the lives and livelihoods of Gulf of Mexico residents and did immeasurable destruction to Gulf ecosystems.

But BP was there in spirit. Its campaign contributions helped get many members of Congress and Senators elected, it was implicated in the oil industry effort to paper Washington, D.C. metro stations with ads, and just the day before, the halls of Congress were filled with lobbyists and others clamoring for seats at the Oil Spill Commission hearings.

And while the President didn’t say those two letters, BP was implicated in his statement that we need to get 80% of our energy from clean sources by 2035. Because who would be better than BP, a company tarred and feathered and now in need of a clean break, to help us build our clean energy portfolio so it can provide 80% of our electricity by 2035?

Let’s face it, BP owes the American people a lot more than just those damages checks. The spill took an immeasurable toll on our fisheries and on the marine ecosystem. The marine life in the Gulf will never really be “made whole” no matter how big the fines are. What can BP do to make it up to us? The answer goes back again to those same two letters: B-P. The company should now, really and truly get “Beyond Petroleum.”

“Old-style energy” needs to give way to “new energy” and companies that help to shepherd that will have a role to play in the energy future. So far, BP has made paltry investments in clean energy, much less than you’d think after seeing its green-washed advertising campaign, or considering its shear wealth and tremendous profits. After all that, the company has committed to put only about 6% of its total investments into clean energy. Why not 30%?

For comparison, look at another company, like General Electric. GE certainly has skeletons in its closet, but the company plans to have 30% of its investment portfolio in clean energy by 2015. Why can’t BP do the same?

By the way, most of BP’s 6% shouldn’t even qualify as clean. More than a third of it is slated to go into biofuels that don’t necessarily get us a net reduction in carbon dioxide, and so-called carbon capture and storage. Even worse, in 2009, BP planned to put another $12 billion into tar sands. That, in itself, is three times more money than it was planning to invest in clean energy.

BP has a long way to go to get to 30% but the company can learn a lot from GE, whose “Ecomagination” projects include development of offshore wind, solar installations and smart grid technologies. BP could learn from GE that investment in alternative energy pays. GE has made $70 billion in revenue in five years on its Ecomagination projects and the profits are still growing. GE has already taken $6 billion in revenue from its $1.5 billion investment in wind farms.

Who cares whether they do it for the money or just to clear their name. But if BP ever wants consumers to think of it as something other than that oil company that put profits before safety and trashed the Gulf of Mexico, the company is going to have get in the clean energy driver’s seat. Investing 30% of total spending — the same percentage as GE — on clean alternative energy would be a good start.

Read more: Bp, Wind Power, Energy, General Electric, Congress, Economy, President Obama, Clean Energy, Gulf Oil Spill, Politics, Environment, Oil, Oceans, Green Energy, State of the Union, Solar Power, Green News

Charles Gasparino: Does Morgan Stanley’s James "Don’t Call Me Jim" Gorman Have What it Takes?

Here’s something you should know about Morgan Stanley’s chief executive officer James Gorman: Never call him “Jim.”

I’ve been covering Wall Street now for two decades and never before have I been corrected by a CEOs’ handlers about a first name as much as I have when it comes to Gorman, who took the top job at Morgan about a year ago, and is now struggling to recreate that bank in the aftermath of the 2008 financial crisis, which it barely survived.

Of course, Gorman should go by whatever name makes him feel comfortable, but there is something unsettling about someone in charge of so much worrying about something so trivial (it wasn’t like I called him “Jimbo”).

And that’s starting to become the general consensus on Wall Street, both among his fellow CEOs, analysts who cover the firm and even people inside Morgan Stanley. Most admit that Gorman is a nice enough fellow, very intelligent, and in person doesn’t come across as the the type of stuck-up jerk who gets crazy when you call him Jim instead of James.

But there’s also a worry from these quarters that Gorman and his PR handlers are spending way too much time convincing people he’s a serious CEO to compensate for what some on Wall Street believe is a serious lack of the right kind of experience to run a major investment bank.

“The problem with not having a background in the markets is because Wall Street is still a business involving the markets, and Gorman doesn’t have that experience,” said one prominent analyst who spoke on the condition of anonymity because he was afraid of losing access to key executive at the firm.

Here’s what this analyst means: Gorman didn’t come to the CEO job the traditional route. He spent many years as a consultant for McKinsey & Co. before going to work for his biggest client, Merrill Lynch to run its brokerage unit, and then to Morgan Stanley to run its brokerage department. In other words, unlike his peers, Gorman has never really worked in a revenue producing job, only as a manager of revenue producers, and before that as a consultant to the managers of revenue producers.

Without the more typical banker-trader-broker experience, some analysts worry whether Gorman thinks too much like a micro-managing technocrat, and not enough like a salesman, thus lacking the personal touch needed to run a company that makes its money selling investments to small investors, and finance advice to major corporations.

To be sure, there’s a good case to be made that the traditional Wall Street experience of rewarding the people who make the most money and take the most risk set the stage for the 2008 financial crisis in the first place. But Gorman hasn’t really made the case he’s the right guy to be CEO. For all the worry about his image, Gorman’s obsession (and the obsession of his PR staff) with being called James doesn’t help convince investors and analysts he’s a serious executive.

“We all call him ‘James don’t call me Jim Gorman,'” said another analyst with a laugh.

Then there’s his performance, which on paper is middling at best. Morgan’s earnings jumped 60% during the fourth quarter of 2010, thanks in part to investment banking revenues, but only after other lackluster results. To be sure, the firm’s banking business has had some notable successes, but a chunk of that can be attributed to winning deals from the government’s various corporate bailouts, and the firm’s ties to the Obama administration that was in charge of unwinding those bailouts through various stock sales. One of the firm’s top political players was Tom Nides who recently resigned as chief operating officer to take a job with the administration as Deputy Secretary of State.

The stakes for Gorman — and Morgan — are of course huge. Morgan Stanley is one of Wall Street’s most storied franchises (half of the venerable House of Morgan; the other half being JP Morgan). After Morgan Stanley survived the 2008 financial collapse, albeit with taxpayer help, it shifted its business model away from risk taking in the bond and stock markets to giving advice, and some analysts now worry that Morgan’s business model of focusing on clients won’t generate enough money to satisfy investors.

As part of its new business model, Morgan acquired Citigroup’s brokerage unit known as Smith Barney. Gorman, first as brokerage chief and now Morgan’s CEO is taking the lead role in the unit’s integration to create the largest brokerage firm on Wall Street, with close to 20,000 salesman selling stocks, bonds and mutual funds to small investors across the country.

But that integration hasn’t always gone smoothly; some people at Smith Barney worry about losing their jobs to less qualified people at Morgan, and there have been some layoffs and office closings in order for the firm to squeeze at least $1 billion from the move.

My sources tell me that Morgan’s PR staff clearly understand the doubts surrounding Gorman faces and they have begun a carefully orchestrated “charm offensive” making Gorman available to some selective publications where he can explain his strategy in a controlled setting (a profile of him is expected in Fortune as soon as next week), while keeping him away from others. He’s dodged numerous requests to be interviewed by me; indeed the last time I approached him for an interview while at a conference in New York City, I was quickly surrounded by his security detail, who whisked him away.

One problem with the PR campaign is that some of those doubts surrounding Gorman can be found inside Morgan Stanley as well, people close to the firm tell me. Before Mack became CEO, Morgan was run by Phil Purcell, another consultant who was widely despised inside the ranks for his sour disposition and because Morgan lost ground to rivals. Morgan executives openly worry that they’re being led by “another Purcell.” Indeed Gorman didn’t make many friends inside Morgan’s investment banking ranks when he publicly attacked Wall Street’s “star system” — or paying people based on how much money they bring into the firm — and asserted he would make cuts compensation even for those who stars who perform.

Even worse for Gorman is the continued presence of John Mack, the firm’s long time CEO. Mack relinquished the top job to Gorman in 2010, but remains as its chairman. Such splits between CEO and chairman rare on Wall Street and publicly Morgan says that it’s Gorman’s call on whether Mack stays or goes.

Maybe so, but people close to the firm say it’s Morgan’s board of directors who want Mack to stay around because they don’t have the confidence in Gorman’s ability to run the firm by himself. “They’re keeping John Mack around for good reason,” said another analyst.

How long does Gorman have to show he’s the right guy to run the firm? Its hard to know. Among investors in bank stocks, patience runs thin. Of course, much depends on the stock price, which is trading at $30 a share — about the same level as when Gorman took over a year ago reflecting an overall indifference with his performance.

“Morgan is good firm, but there’s a question: Is Gorman up for the task,” said on executive at a rival bank. “No one knows for sure, not even people inside Morgan Stanley.”

Read more: Morgan Stanley CEO, James Gorman, Morgan Stanley, Wall Street, Business News

Bernanke Says Growth, Inflation Still Missing Fed Goals

WASHINGTON (Reuters) – The U.S. economic recovery still needs help from the Federal Reserve despite signs of improvement, Chairman Ben Bernanke said on Thursday.

The Fed chairman provided a modestly more rosy outlook for the world’s largest economy than he has done in previous speeches, citing gains in household spending, improved confidence, and stepped up bank lending as signs 2011 may bring stronger growth than 2010.

“Although economic growth will probably increase this year, we expect the unemployment rate to remain stubbornly above, and inflation to remain stubbornly below, the levels that Federal Reserve policymakers have judged to be consistent over the longer term with our mandate,” he said in remarks prepared for delivery to the National Press Club in Washington D.C.

Bernanke’s comments suggest a Fed that believes it has plenty of time to let its policies boost growth and pull down a lofty unemployment rate before it needs to worry about tightening financial conditions to keep any price pressures in check.

Even the hard hit job market shows some grounds for optimism, Bernanke said.

However, modest growth and cautious hiring suggest that it will be several years before the jobless rate returns to a more normal level, he said.

“Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established,” he said.

The Fed chairman defended the U.S. central bank’s controversial $600 billion bond buying program, saying its benefits are evident from a range of financial market metrics.

These include higher stock prices and less volatility in equities markets and narrower spreads between riskier and less risky corporate bonds, he said.

U.S. Treasury bond prices extended losses after Bernanke’s comments.

Bernanke played down worries that recent commodity price rises pose an inflation threat.

“Overall inflation remains quite low,” he said.

Copyright 2010 Thomson Reuters. Click for Restrictions.

Read more: Business News, US Economy, Federal Reserve, Ben Bernanke, Inflation, Economy Growth, Federal Reserve Goals, Business News

Suzanne Skees: Egypt Exploded: An American in Cairo Ponders What Our Citizens Can Do for Theirs

Egypt and Jordan — I arrive in Cairo just before last week’s protests begin. Traveling with a group of 38 tourists — some of whom have saved and dreamed for a lifetime to see Egypt’s treasure chest of archeological, cultural, and political history — we land unwittingly amidst the uprisings, and proceed to spend several days moving just ahead of the mounting danger.

On our first day, we walk through the museum of Coptic Christianity, then immerse ourselves in Islam, the religion of pure monotheism and 5-pillar devotion embraced by 90% of Egyptians and 1/7 of the world’s population. Strolling the grand Muhammad-Ali Mosque, viewing Cairo from the bird’s nest of Saladin Citadel above the city, and buying local trinkets at Khan el-Khaliki Bazaar, we meet with smiling faces everywhere. Our smiling guide Ahmed called himself “Mr. President Obama,” proud that his compatriots see a resemblance in him to the U.S. president.

However, by the time dusk splays across the city and our bus snakes its way back through the its urban streets, we come head to head with a human blockade of police with semiautomatics and shields. They will not allow us to cross the Nile River. The scene begins to look ominous. I stare through the bus window at the faces below and realize these men look very young and a little scared. In Egypt, 49% live below the World Bank’s measure of poverty ($2/day) and 80% live on less than $3. These guys only make minimum wage; they’re just trying to make a living. They, too, have no idea what will unfold: that they will retreat and be replaced by tens of thousands of army troops facing down a million street protestors. They, like we, cannot know that looters will overpower their authority, destroy inventory, and threaten the safety of hardworking families across Egypt. They cannot foresee that communications, banking, schools, and industry will come to a halt and their loved ones will remain essentially under house arrest for weeks, perhaps months, to come.

Meanwhile for us tourists, our savvy Egyptian guides finagle a police escort that evening across the bridge, and we walk the rest of the way to the haven of our Western hotel. Next day we — along with thousands of other tourists from Europe, Asia, and the U.S. — throng the Egyptian museum, oohing at the coins, papyrus, and scarabs downstairs and aahing at the Tutankhamen treasures and the Pharaoh mummy room upstairs. We lose contact with our families when President Hosni Mubarak shuts down the country’s Internet and attempts to limit social media. We flee Cairo, but only into Upper Egypt, to float in hot-air balloons over the Valley of the Kings. As Mohamed ElBaradei begins to rally support for the Muslim Brotherhood, we pose for photographs among the pillars of the Luxor, Hatshepsut, and Karnak Temples. Mobs kill over one hundred and harm over a thousand, and Mubarak sends in troops to protect the antiquities we have just visited. Systematically, everything shuts down — the Cairo airport, banks, stores, and schools. Finally, we begin to make our way out of the country.

We push on in our cushioned buses to the port city of Hurghada and board a small ship to head out into the Red Sea. Still following our amazing tour itinerary, we have not experienced the slightest inconvenience or danger. The contrast between our sumptuous meals and lavish accommodations and the daily struggle of our Egyptian hosts — even before this crisis — strikes me as garish, insulting, rude. Our American tour operator, Mr. Ati Jain of Cross Culture Journeys (ccjourneys.com), disagrees. “Tourism is the lifeblood of this country,” he tells me. Sure enough, the newscasts we soon retrieve via satellite on the boat confirms that tourism comprises some 25% of the GDP here and employs 2.6million of Egypt’s 80million residents.

“You have come here because you love our country,” one local tells me. “We thank you for coming here and we love you for bringing your business here.”

Ms. Sonia El Masiri an Egyptologist from Alexandria who has worked for nearly half-century in the tour business, laments the violence of a few that has undermined safety for the whole. “These hooligans are ruining the country for everyone,” she shakes her head sadly. She has just spent our last five days sharing her encyclopedia knowledge of her dearly beloved country with anyone on a tour that asks any range of questions from any perspective. Now, her husband, daughters, sons-in-law, and grandchildren are all huddled together in her 4th-floor Cairo apartment. As with millions of peaceful citizens, they have out of necessity set up a neighborhood watch, standing guard with kitchen knives and brooms.

Sonia and several other Egyptians I speak with tell me that they dearly wish their voices would be heard above the din of extremists and looters. All they want sounds a bit like the dream from my childhood home: peace, freedom, safety, economic security, and democracy with a small d.

Now in Jordan (with the fast-thinking Mr. Jain, who has kept us out of harm’s way but also made impeccable arrangements to see the sites of Jordan and Jerusalem in place of the pyramids and sphinx), we finally get back online but still feel ourselves hovering in the unreality of having just been in the middle of a crisis that continues and worsens after we’ve gone. Mubarak makes his public declaration that neither he nor his son will run and calls for elections to be moved up from autumn to spring, but the mobs’ fury increases that he does not immediately step down. Here in Jordan, we hear reassurance that King Abdullah’s abrupt replacement of his own cabinet this week is a positive move and reflects the Jordanian’s “semidemocratic monarchy” quick response to the wishes of her people.

In Aqaba, we change the flag on the ship from Egyptian to Jordanian, but we take our affection for the people we have just met along with us. Zuhair Dmour, our guide through Petra and Wadi Rum, talks about how deeply we all feel the effects of Egypt’s explosion — not just in the Middle East. “The whole world is becoming a small village,” he says.

And in that small village, I wonder as I continue on my privileged journey, what can we citizens do for our Egyptian neighbors?

It occurs to me as I make my way north and east into the Arab region, it’s pretty simple: I could be a better friend to Egypt. Maybe there are myriad ways to be a friend, like cooking the food or reading the history of Egypt. Like a dear old friend we’ve taken for granted for millennia, however, Egypt now needs my attention beyond that of a consumer of her legacy and beauty. With three simple steps I can easily begin.

Being in the nonprofit business, I had hoped to visit a couple of microfinance and school programs in Cairo after our tour — which of course will not happen in February 2011, as the city remains paralyzed. Still, from home I can do more to learn from and correspond with Egyptian experts working to effect social change, and offer them my moral support or donated dollars.

Second, I can listen closely to the multiplicity of voices emerging from an Egypt far too long silenced under the 30-year dictatorship of the outgoing president. I can hear, respect, and repeat the message of my new friends in the Valley of the Nile. Ahmed and Manal, Sharif and Sonia, can be amplified every time I tell someone back home about their struggles and dreams.

And finally, I can come back. As President George Bush told American citizens after the terrorist attacks or 2001 — and any survivor or violence can testify to this — the best revenge is to live well, go on, survive, and thrive. I hold the vision of an Egypt whose people’s voices get heard, an Egypt that makes its way through this muck into fair elections and then rebuilds its constitution and governance to represent one and all, in peace… and an Egypt who, more stunning now than in her antiquity, receives guests from all over the world who bring more than cash. Next time, we’ll pack a deeper understanding of our hosts. We will come back, and soon, and as friends.

Read more: Jordan, Egypt, Philanthropy, Tourism, Muslim Brotherhood, Social Change, World, Economy, Cairo, Mubarak, Obama, Travel News

Ilana Ross: A World Without Borders

I’ll tell you what I’m not getting my best friend for her birthday: a Kindle. For one thing, she’s turning twenty-three, not forty-five. For another thing, I only spend that kind of money on shoes.

But most importantly, I won’t buy an e-reader because I refuse to be complicit in a phenomenon which threatens to destroy what I love most about America and consumerism: bookstores. For those of you keeping track on Amazon, e-books are an increasingly hot commodity, while old print editions of The Catcher in The Rye go for a bag of Fritos. And as books go out of fashion, so do the bookstores.

Books have been a dying breed of entertainment since before the emergence of the e-reader, or really whenever it was people discovered how great television and movies are. Why spend the day reading Little House on The Prairie, when you can watch the ladies all grown up in Sex and The City?

It’s one thing to lament the inevitable decline of the book, but there are bigger things at stake here. After all, what’s a bookstore without any books? A candle shop? The Papery?

These days, independent bookstores are few and far between. But it’s not just the mom-and-pop establishments that are “biting the dust” or barely surviving in a brutal economy. Last year Barnes & Noble put itself up for sale, and Borders looks to be on its last legs as well. Don’t be swayed by its seamless packaging and effortless efficiency; the e-reader spells trouble.

Bookstores are feeling the winds of change, and struggling to adapt. Last winter when I walked into my local B & N, I noticed that the “New in Paperback” section had been replaced by a stand advertising the new e-reader. I was appalled. The “booksellers” here were peddling the very instrument designed to destroy them.

Where were the books whose covers I liked to judge and whose pages I liked to bend before not buying them? They’d been moved to the next table over, like displaced persons in a corporate refugee camp. We ought to seriously consider just what we’ll be missing if electronic reading becomes the norm. In a dystopian world without bookstores, where will I go when I need to find the right mind space, to read free magazines and pick out coffee table books for my imaginary coffee table? Bookstores are what’s to do when you’re half an hour early to a movie or a dinner date. It’s where the homeless and privileged alike can sit in opposing armchairs and enjoy a Dean Koontz thriller or a Nora Ephron classic. Because rich or poor, we all feel bad about our neck.

Bookstores are places for imagination, for serious reflection, for a skinny vanilla latte. Bookstores recognize that the best part of life is in the browsing, that non-committal time when you let yourself believe that you could be the kind of person who reads Ishiguro. When you mosey through a bookstore, you don’t rely on computerized “genius” estimations of what you might like, but instead leave it up to chance and a wandering eye.

When I walk through the “Teen Paranormal Romance” stacks, I can skim the bestselling books of all time. When I make my way into the nonfiction area, I give myself time to delight in the tables of Soviet era biographies that I’ll never read but will think about maybe buying for my Dad.

Imagine that in a future world without bookstores, when the next Harry Potter book finally comes out, my kids won’t be able to line up in their costumes and dance around at their local bookstore at midnight. No, they’ll be out on the street, waiting to download it onto their personal touch Pads or whatever gadget they’ve come up with to replace all need for human interaction. I’ll pick them up from the corner in my motorpod and I’ll warn them not to associate too much with the Druids, because I don’t trust a robot, or anybody who can’t think for herself.

The rise of the electronic reader is no surprise in an era where machines are proving more capable and error-proof than ever. They have only automated check-outs now at my local CVS, giving lonely people one less opportunity to chat about the weather and whether the Mentos are on 2 for 1 sale.

I worry that when we foreclose bookstores to the online world, we are sending more than a message to our books that they’re out of stock and unwanted, but to our next generation: that there’s no time for browsing, for nonsense, for taking more time to do something that can be done with one or maybe two clicks.

Gutenberg would be very old today, and he probably would be more interested in the development of indoor plumbing than anything else, but I wonder what Johann van would have to say about what’s become of his invention and the stores that housed them. Probably something in German.

I hate to argue against the passing of time, modernization and technological advance because it seems pointless. I’m not sure bookstores can be saved, and I’m not advocating a mass Kindle burning or anything radical. I’m just hoping that we can preserve some semblance of life outside our PCs (and/or Macs).

Read more: Paula Deen, Bankruptcy, Barnes and Noble Nook, Books, Barnes and Noble, Borders, E-Reader, Technology, Bookstores, Reading, Kindles, College News

Mubarak ‘fears chaos if he quits’

Egyptian President Hosni Mubarak says he would like to resign immediately but fears the country would descend into chaos if he did so.

UPDATE 1-Beckman draws buyout bids in 2nd round -sources

NEW YORK, Feb 3 (Reuters) – Second-round bids for medical
diagnostics company Beckman Coulter were due on
Wednesday, and drew offers from two private equity consortia,
sources familiar with the…

Mubarak says resigning would bring chaos

CAIRO (Reuters) – President Hosni Mubarak said on Thursday he wanted to quit but that he feared his resignation would bring chaos to Egypt, as protesters demanding an end to his 30-year rule clashed with his supporters on Cairo’s streets.